On Jan. 24, 2018, bills were introduced in the Hawaii state legislature (HB2702, SB3067 and SB3101) that would require REITs to file either a composite (entity-level) tax return or pay withholding tax attributable to distributions to non-resident shareholders based on their pro rata share of a REIT’s income attributable to Hawaii.
Also, these bills would require REITs to include on their Hawaii corporate income tax returns the name, address, and social security or federal identification number of each person owning stock in the REIT at any time during the taxable year. In addition to possibly being unconstitutional, these requirements would not be administrable because shares in all publicly traded companies, including REITs, change hands constantly and public shareholders hold stock in “street name.”
Nareit will continue to oppose these bills, just as it has opposed similar legislative proposals in past years to alter or eliminate the dividends paid deduction in Hawaii. More information is available at The REIT Way Hawaii.
(Contact: Dara Bernstein at dbernstein@nareit.com)